How is each type of corporate vehicle used to invest in real estate taxed?
Corporate vehicles incorporated in Ukraine are recognized as tax residents and are therefore taxed on their worldwide income. The standard corporate profit tax rate is 18 percent.
Taxable supplies of goods/services are normally subject to 20 percent VAT.
Legal entities and individuals pay property tax in respect of real estate assets. Property tax applicable to real estate consists of:
The rates of immovable property tax are set by municipalities and for residential and commercial property may not exceed (per sq. m of the area of the property) 1.5 percent of the statutory minimum salary, effective on 1 January of the tax year.
Municipalities are free to decide on whether to set immovable property tax for particular vicinity and on the rate to apply subject to the mentioned cap (ie 1.5 percent).
The taxable value for immovable property tax includes the total area of residential/non-residential property.
Immovable property tax on individuals is assessed by tax authorities. Legal entities self-assess the tax and file the relevant tax return annually.
Land payment consists of:
The value for land tax purposes is:
The amount of land tax in regions with an established normative valuation cannot exceed the following thresholds (irrespective of where the property is located):
The amount of land tax applicable to plots of land which are located outside developed areas and which have not undergone normative valuation cannot exceed 5 percent of the normative valuation of a standard unit of arable land established for the relevant region (oblast). For agricultural land plots which are located outside developed areas and which have not undergone normative valuation land tax cannot be less than 0.3 percent and cannot exceed 5 percent of the normative valuation of a standard unit of arable land established for the relevant region.
The amount of land rent is stipulated in the lease contract between the lessee and state/municipal state authority. The land lease contract is subject to registration.
The law stipulates that land rent cannot be less than the amount of land tax for respective plot and more than 12 percent of the normative valuation.
Land tax is assessed annually for the following year and is paid monthly by the owners or users of land. Land rent is also paid monthly.
Withholding tax may also apply to outgoing cross-border payments (dividends, interest, etc) at the standard rate of 15 percent unless otherwise stipulated by a relevant double tax treaty.